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Walden v. Maryland Casualty Co.

United States District Court, D. Montana, Missoula Division

November 29, 2017

BREANNE WALDEN, DANIELLE DESCHENES AZURE, JESSICA BLACKWEASEL, SABRINA REMUS COYNE, BRITTANY DEAN, JENNIFER DEMENT, DANIELLE DUNCAN, JACKIE GREAVU, BETH HAYES, JANA HEILIG, KEALLIE LIETZ, JACKIE MULLENNAX, SARA ONSAGER, ANNA RADFORD, BARBARA SLOAN, MOLLY STILSON, and KYRA TILSON, Individually and as Assignees of DB&D, LLC d/b/a DAHL'S COLLEGE OF BEAUTY, Plaintiffs,
v.
MARYLAND CASUALTY COMPANY, and DOES 1-5, inclusive, Defendants.

          ORDER

          Dana L. Christensen, United States District Court Chief Judge

         Before the Court is Defendant's Motion for Summary Judgment (Doc. 78.) For the reasons explained below, the Court denies Defendant's motion.

         Procedural and Factual Background

         On October 7, 2015, the Court granted Defendant Maryland Casualty Company's ("Maryland") motion for summary judgment, and denied all other pending motions as moot. The Ninth Circuit reversed and mandate was issued on July 7, 2017. The parties submitted a joint status report on August 18, 2017, pursuant to the Court's request, outlining the motions that are now ripe and need to be resolved. Defendant's July 31, 2015 Motion for Summary Judgment is one of the ripe and pending motions.

         Because the parties are familiar with the facts of this case they will only be recited as necessary to understand the Court's Order.

         Legal Standard

         A party is entitled to summary judgment if it can demonstrate that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Summary judgment is warranted where the documentary evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). Only disputes over facts that might affect the outcome of the lawsuit will preclude entry of summary judgment; factual disputes that are irrelevant or unnecessary to the outcome are not considered. Id. at 248. In ruling on a motion for summary judgment, a court must view the evidence "in the light most favorable to the opposing part." Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (quoting Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)). "[T]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 1863 (quoting Anderson, 477 U.S. at 255). "If the moving party has the burden of proof at trial, that party must carry its initial burden at summary judgment by presenting affirmative evidence as to the essential elements of its case such that no reasonable jury could find for the non-moving party." Alliance for the Wild Rockies v. United States Dept. of Agric, 938 F.Supp.2d 1034, 1039 (D. Mont. 2013), rev'd in part on other grounds, 772 F.3d 592 (9th Cir. 2014).

         Analysis

         Maryland argues that summary judgment is proper because Plaintiffs Brittany Houston ("Houston") and Anna Radford ("Radford") have failed to prove they suffered physical manifestations from their emotional distress, which is a prerequisite to finding coverage under Maryland's insurance policy. Since Maryland filed its motion, Plaintiffs have supplemented the record with affidavits claiming physical manifestations of their emotional distress. Maryland argues the new statements are sham affidavits and the Court should strike them and award summary judgment to Maryland.

         Plaintiffs argue that summary judgment is not appropriate because the affidavits raise an issue of material fact regarding whether they suffered physical manifestations of emotional distress. Additionally, their testimony is supplemented with the affidavit of Katy Nicholls ("Nicholls"), a LCSW who diagnosed both Plaintiffs and concluded that they both suffered from physical manifestations due to their emotional distress.

         Prior to reaching the merits of Maryland's summary judgment motion, the Court must first address whether the affidavits are a "sham."

         I. Sham Affidavits

         The general rule in the Ninth Circuit is that a party cannot create an issue of material fact to preclude summary judgment by raising additional facts that are inconsistent to their prior sworn testimony. Kennedy v. Allied Mut. Ins. Co., 952 F.2d 262, 266 (9th Cir. 1991). "If a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own prior testimony, this would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact." Id. (quoting Perma Research and Dev. Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969)).

         However, this rule "should be applied with caution." Van Asdale v. International Game Tech.,577 F.3d 989, 998 (9th Cir. 2009). The "sham affidavit" rule is contrary to the court's general role in deciding a summary judgment motion, which is not to make "credibility determinations or weigh conflicting evidence." Id. Thus, the Ninth Circuit has limited the rule to cases where (1) the affidavit is "actually a sham" and (2) the inconsistencies are "clear and unambiguous." Id. Courts analyzing the rule look to whether subsequent testimony "flatly contradicts" previous testimony, or whether the inconsistencies are attributable to confusion. Van Asdale, 577 F.3d at 999; Kennedy, 952 F.2d at 267. "The nonmoving party is not precluded from elaborating upon, ...


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